Samsung Networks sales fell 25% in 2024, but 5G outlook improvesSamsung Networks sales fell 25% in 2024, but 5G outlook improves

Revenues generated by Samsung Networks last year fell at a much sharper rate than sales at Ericsson and Nokia.

Iain Morris, International Editor

January 31, 2025

5 Min Read
Samsung stand at trade show
(Source: Samsung)

After the stomach-lurching drops of the last two years, the 5G network products market finally appears to have hit rock bottom. Market research firm Dell'Oro, which put the rate of sales decline at between 10% and 20% for the first nine months of 2024, is guiding for no change at worst and 2% growth at best this year. Ericsson last week reported 4% year-over-year revenue growth at its mobile networks business group for the final quarter of 2024, after sales fell 12% for the first three. At Nokia's equivalent unit, revenues were down 28% for the first nine months of the year, pummelled by the loss of a contract with AT&T. They dipped just 1% in the last quarter.

Yet there has been no similar flattening at Samsung, the South Korean vendor that has positioned itself as a third way in countries where Chinese vendors are now restricted. Revenues at the smallish Samsung Networks business fell 27% year-over-year for the first nine months of 2024, to about 2 trillion South Korean won (US$1.4 billion) as 5G work dried up. And the group earnings report out this week shows they were down 20% for the final quarter, to KRW800 billion ($550 million).

While that is clearly some improvement, it means full-year sales at Samsung Networks plunged a quarter, a rate that compares unfavorably with the 21% decline at Nokia and – especially – the 8% fall at Ericsson, which picked up the AT&T work that Nokia lost. It's also unclear if the network equipment unit is profitable. Samsung groups that with its much bigger division making smartphones and other consumer devices. A breakout revenue line for the gadgetry allows curious reporters to calculate what Samsung makes in network sales. There is no similar breakdown for operating profit. But across networks and gadgets it fell 22% year-over-year, to KRW2.1 trillion ($1.5 billion), despite sales growth of 4%, to KRW25 trillion ($17.2 billion).

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Indian and US setbacks

Samsung has clearly not been helped in the 5G era by developments in India, where the pace of rollout markedly slowed in 2024 after a burst of activity the year before. Both Ericsson and Nokia previously blamed their weak performance partly on that slowdown. But Samsung's problem was bigger. In 4G, it landed a contract to the build the entire radio access network (RAN) for Reliance Jio, a new entrant that rapidly eclipsed its older rivals to become India's biggest telco. When it came to 5G, Jio opted to use Ericsson and Nokia instead. Given India's size, the loss of market share is likely to have put a major dent in Samsung's network sales. And annual revenues have almost halved since their peak in 2022.

The company's other notable customer outside South Korea is US telco giant Verizon, which decided to abandon Nokia – at a time when the Finnish vendor was wrestling with product problems – and switch to Samsung for a part of its 5G rollout. But this deployment has not advanced as quickly as it might have done. By October 2024, four years since it first introduced Samsung, Verizon was still using Nokia RAN products across about 10,000 mobile sites, according to an authoritative industry source.

Verizon, like other US telcos, has also slashed capital expenditure in recent years. This followed a buildup of inventory after the COVID-19 pandemic, when concern about supply chains drove operators to stockpile. The long "correction" that followed, as those operators made do with what they had already purchased, was blamed heavily by vendors for disappointing results. Verizon's capital expenditure fell by $4.3 billion in 2023, to about $18.8 billion, and another 9% last year, to roughly $17. 1 billion.

So far, Samsung has also not been able to land contracts with other major US telcos and AT&T's $14 billion contract with Ericsson seems a potential barrier to any business with that one. While AT&T has promoted the Ericsson arrangement as an "open RAN" deal, meaning it has the option to pair other vendors with Ericsson at some sites, it has already identified two other radio unit suppliers – Fujitsu and Mavenir – and may be wary of managing a bigger number.

What's more, AT&T is determined to have only one supplier of service management and orchestration, according to Ericsson, and it looks solely reliant on Ericsson for RAN software, too. Combos of Tier 1 vendors – Ericsson and Samsung, and especially Ericsson and Nokia – also seem unlikelier to happen, for competitive reasons, than tie-ups between Ericsson and smaller players.

Things can only get better

This still leaves T-Mobile, of course, while Verizon plans to spend more this year – $18 billion, at the midpoint of its latest guidance – than it did in 2024. Its recent appointment of Yago Tenorio as chief technology officer will have delighted Samsung executives. Tenorio previously led network strategy for European telco giant Vodafone, where he was a big champion of virtual and open RAN (vRAN/ORAN), concepts that Samsung lauds, and an outspoken fan of Samsung. When Vodafone named vendors to replace Huawei in the UK, Samsung was at the top of the list as the provider of RAN software and most radio units, the critical 5G elements.

The results of a Vodafone tender covering tens of thousands of sites across Africa and Europe are now eagerly awaited by the rest of the industry. And there is an expectation, given Vodafone's use of Samsung and key partners in both the UK and Romania, that the South Korean vendor will secure a big share of the contracts. In other European markets where Huawei must be removed under government orders, Samsung has a clear opportunity to advance.

The only revenue guidance it offers for the current quarter is the somewhat inauspicious statement that sales will fall as domestic operators cut spending. But it envisages performance improvements over the course of the year thanks to "network expansion of major operators, securing new business orders, and increased adoption of vRAN/ORAN." Its huge parent, which spent about $24 billion on research and development last year, offers reassurance for operators worried about the long-term financial viability of smaller vendors. But with Dell'Oro guiding for no RAN sales growth over the next five years, any gains by Samsung may have to come at someone else's expense.

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About the Author

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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